The article titled Smelling the Rat in the DHFL CoC Resolution Process: A Letter to the President of India, published on @Once in a Blue Moon Academia, raises serious concerns about the resolution process of Dewan Housing Finance Corporation Limited (DHFL) under India’s Insolvency and Bankruptcy Code (IBC). The letter criticizes the actions of the Reserve Bank of India (RBI)-appointed Committee of Creditors (CoC) and expresses fears of corruption and mismanagement.
Key issues highlighted include:
Conflict of Interest: The involvement of entities like Piramal Group in the resolution process is questioned, suggesting possible bias due to previous business relationships with DHFL and political connections​. There are allegations that the process might have been manipulated to favor certain bidders over others, potentially harming the interests of the common creditors​.
Lack of Transparency: The article underscores a lack of transparency and accountability in the actions of the CoC, with allegations of a “transparently opaque” process that could lead to the unjust treatment of stakeholders, especially the small depositors and public sector banks.
The letter calls for an intervention by the President of India to ensure a fair and transparent resolution process, protecting the rights and interests of all affected parties. The concerns raised reflect broader apprehensions about the integrity of the insolvency resolution framework in India, particularly in high-profile cases like DHFL.